Guide · Profitability
Markup vs margin: the mistake that quietly kills contractor profit
A 30% markup is NOT a 30% margin. Here's the difference, with the maths.
Markup is added on top of cost. Margin is profit as a share of the selling price. They are not the same number.
Cost R100, 30% markup → sell R130. But your margin is 30/130 = 23%, not 30%. Contractors who price on markup and think in margin slowly bleed profit on every job.
Rule of thumb
To hit a target margin, divide cost by (1 − margin). For a 30% margin on R100 cost: 100 ÷ 0.70 = R143.
Lulaworks shows cost, markup and margin on every line as you quote, and the real profit on every job as it runs.